(Yicai Global) Aug. 13 -- Shares in Chinese brokerage First Capital Securities hit the exchange-imposed limit up today on reports in the foreign media that it is to merge with its counterpart Capital Securities as part of the country’s move to beef up the players in its securities industry to match foreign contenders as the country prepares to open up its financial markets.

First Capital Securities' stock [SHE:002797] surged 10 percent to close at CNY11.20 (USD1.61) apiece, giving it a market cap of CNY43.2 billion (USD6.2 billion).

“China plans to merge domestic broker First Capital Securities with smaller rival Capital Securities, underscoring Beijing’s determination to consolidate the brokerage industry to take on the giants of Wall Street,” Reuters reported today, citing three sources familiar with the matter.

The company has no information that should be disclosed that has not already been disclosed, First Capital told Yicai Global.

Both Capital Securities and First Capital are controlled by state-backed Beijing Capital Group, which is in turn directly under the supervision of the State-Owned Assets Management Commission of People's Government of Beijing Municipality.

The Beijing government indirectly holds a 91 percent stake in Capital Securities, which has yet to go public.

A private placement scheme initiated by First Capital in July would see the Beijing government’s holdings in the Shenzhen-based brokerage reach 22.7 percent.

Last month, the China Securities Regulatory Commission issued a notice encouraging qualified securities and fund management companies to carry out mergers and acquisitions to solve the problem of peer competition. Previous rumors of a merger between the country’s largest broker CITIC Securities and China Securities have not yet been officially confirmed.

Editor: Kim Taylor